Ahram Weekly

From the trading floor

Al-Ahram Weekly

Beltone Financial: The board of Beltone Financial, a local investment bank, approved the launch of a bid for a stake in Oragroup, an African banking and financial holding company with outreach to 12 African countries through more than 130 branches across the continent.

Beltone, owned by Egyptian businessman Naguib Sawiris, took this step as part of a plan to expand its presence in Africa. The bank has not yet revealed the value of its bid, but it said it would sign a non-binding offer and intends to conduct a preliminary feasibility study for the transaction before commencing due diligence.

Sawiris has tried twice to buy other investment banks, the first in 2014 when he tried in vain to buy a stake in EFG-Hermes and a year later when his LE900 million bid to buy CI Capital, the investment arm of Egypt’s largest private-sector bank Commercial International, was held up.

In 2017, he started River Bank, which has a licence to operate throughout Europe. Based in Luxembourg the pan-European lender specialises in funding small- and medium-sized enterprises (SMEs) focusing on the Benelux countries of Belgium, the Netherlands, and Luxembourg and Germany.

Six October Development and Investment Company (SODIC): The company reported a gross profit of LE266 million, equivalent to 52 per cent of the quarter’s revenues compared to 37 per cent in the corresponding quarter of 2017.

Net contracted sales grew nine per cent year-on-year to LE1.2 billion. According to a press release, the sales figure was inflated by non-residential development sales, which represented 78 per cent of the net contracted sales for the period. The quarter also witnessed the launch of the Eastown District New Cairo (EDNC), a commercial development in the heart of New Cairo. While construction commenced this year, the project is slated for completion in 2021.

Managing Director Maged Sherif said the company’s new land acquisitions, including 1.3 million square metres of land on the North Coast, should drive as much as LE15 billion in sales, and a 500-acre plot in West Cairo “brought the company’s total land bank to eight million square metres, putting over 10 years of inventory visibility in all our markets”, the press release quoted Sherif as saying.

A sought-after merger with Madinet Nasr Housing and Development (MNHD) “would leverage on the strengths of the two companies in their respective target markets and accelerate the monetisation of a consolidated land bank of 14 million square metres,” he said.

SODIC and MNHD had revealed talks about a potential merger last month. SODIC plans to deliver 1,048 units in 2018, with expected revenues of LE3.9 billion. The year will mark the commencement of deliveries in two new projects, namely Villette in New Cairo and the North Coast summer resort.

EFG-Hermes: The investment bank is entering a partnership with GEMS Education, a leading provider of private English-language education for students from kindergarten to twelfth grade (K-12), to establish a new platform focused on pre-university education in Egypt.

“Our 50/50 joint venture with GEMS Education will offer our investors unique access to Egypt, the Middle East region’s largest education market, with over 20 million enrolled students. We see a substantial opportunity to create value while making a sustainable social impact on future generations,” said Karim Moussa, head of Asset Management and Private Equity at EFG-Hermes.

GEMS Education owns and operates 47 schools in the MENA region, educating over 118,000 pupils through its growing network of schools.

Edita: The packaged snack-food producer is targeting Saudi Arabia and the UAE as its next export destinations. The move comes as the company, which produces Molto, ToDo and Bakerolls, is planning to start selling its products in Morocco where it is building a new factory in partnership with the Dislog Group.

The partnership agreement follows a memorandum of understanding signed between the two companies in December. Hani Berzi, Edita’s chairman and CEO, said in December that “commercial operations will begin in early 2018 with exports of Edita’s products to Morocco, while the second stage will entail the establishment of a state-of-the-art manufacturing facility in 2019, with an initial investment estimated at around $10 million.”

The company recorded a 50.8 per cent increase in its profits for the first quarter to reach LE 60.9 million.

Orascom Telecom Media and Technology (OTMT): The media and technology group sold its subsidiary MENA Cables to the Egyptian International Submarine Cables Company (EISCC), one of Telecom Egypt (TE)’s subsidiaries. The value of the deal comes in at US$90 million, and it will enable TE to link MENA’s Cables with its own TE North Cable, which connects Egypt to France.

OTMT will use the proceeds of the deal to finance its expansion plans in the finance, real estate, agriculture, entertainment and logistics sectors, according to an OTMT statement which noted that the decision to divest MENA Cables was in line with its strategy to divest its non-core assets. EISCC is financing the acquisition through a shareholder loan. MENA Cables is licensed in Egypt and Italy to operate a submarine telecoms system connecting Europe to the Middle East and Southeast Asia.